ABP Investor Day June 2016

Transcription

1 710 Collins Street, Melbourne VIC ABP Investor Day June 2016 Abacus Property Group June Investor Day

2 Agenda - Introduction Dr Frank Wolf - Property Ventures: Residential land approvals Mr John L Estrange - Property Ventures: Residential developments Mr Cameron Laird - Investment Portfolio: Retail properties Mr Gerard McSpadden - Investment Portfolio: Office and Industrial properties Mr Peter Strain - Investment Portfolio: Storage properties Mr Phil Peterson Westpac House, Adelaide SA Abacus Property Group June Investor Day 2

3 Summary introduction Abacus Property Group ( Abacus ) commenced in 1996 as a property syndicator 14 Martin Place, Sydney NSW 50/50 JV with Kirsh group The business has evolved through changing market cycles We no longer provide investment vehicles to the retail sector but now invest either as principle or partner with sophisticated domestic and global capital We continue to look for asset, project and fund opportunities that satisfy our return hurdles at this stage in the cycle Oasis Shopping Centre, Broadbeach QLD 50/50 JV with Kirsh group Abacus Property Group June Investor Day 3

4 Capital partnering programme Strong track record of successfully partnering with global private equity investors such as Heitman, Kirsh Group, AM alpha GmbH, KKR, Goldman and CDL with circa A$1.2Bn invested since Global Financial Crisis with these partners Capital partnering since 2010 Sector Asset Price, A$ Asset Level IRR Investor Birkenhead Point, Drummoyne VIC Retail 174,000,000 24% Kirsh Group 350 George Street, Sydney NSW Office / Retail 27,000,000 W Property 4 & 14 Martin Place, Sydney NSW Office / Retail 153,500,000 Kirsh Group 32 Walker Street, North Sydney NSW Office 35,600,000 Heitman 484 St Kilda Road, St Kilda VIC Office 68,000,000 25% Heitman 309 George Street, Sydney NSW Office / Retail 68,750,000 17% AM alpha 180 Queen Street, Brisbane QLD Office / Retail 29,500,000 Heitman 35 Boundary Street, Brisbane QLD Office 40,250,000 Heitman Wharf 10, Sydney NSW Office 31,800,000 27% Heitman World Trade Centre, Melbourne VIC Office/Retail 120,400,000 KKR 201 Pacific Highway, St Leonards NSW Office/Retail 115,000,000 Goldman Sachs Oasis Shopping Centre, Gold Coast QLD Retail 103,500,000 KKR Merivale development, South Brisbane QLD Residential Development 275,000,000 1 City Dev. Ltd Total 1,242,300, Represents the total estimated sales revenue from the development Abacus Property Group June Investor Day 4

5 Real estate fundamentals are universal Metrics such as cash on cash yield, rates per sqm and replacement cost act as rules of thumb and should not be ignored because of the weight of capital Source: CBRE Research February 2016 Abacus Property Group June Investor Day 5

6 Real estate fundamentals are universal Submarkets are overlooked when they are considered not institutional enough. This provides opportunity where there is strong tenant demand or solid demographics Source: CBRE Research December 2015 Abacus Property Group June Investor Day 6

7 Office opportunities Yield gap between CBD and non-cbd office markets remains wide Suburban office markets enjoy a significant rental affordability advantage over nearby office markets Suburban office markets offer prospect of strong rental growth Liquidity starting to focus on non-cbd office markets B Grade office assets in Brisbane CBD Brisbane recovery possibility may have been understated Forecast new supply is low Yield spreads between prime and secondary remain wide Countercyclical investment opportunities in the resource state of Western Australia Ongoing opportunity to identify office assets which have value add attributes 484 St Kilda Road, Melbourne VIC Both charts sourced from JLL Research: Q Abacus Property Group June Investor Day

8 Retail opportunities Top performing regional centres, prime centres and neighbourhood centres to continue to do well Abacus is focused on convenience based retail which is less vulnerable to macro forces Retailers still have a need to have presence in physical stores but in core locations Flagship stores in CBDs have become anchor tenancies for large international brands pushing significant rental growth Flagship stores are happy to pay higher rent as the location is viewed as part store/part advertising marketing Australia s internet shopping still in infancy compared other countries, especially China: Research shows that what China was doing several years ago, today s consumers across the globe are just catching up. Almost one in five Chinese consumers shop online daily, compared to 7.1% globally and under 5% in Australia Many transactions are now coming from online devices in China, 65% shop via the mobile phone at least monthly, globally that s 28% and 46% have never shopped via the mobile phone. Around 10% of Australian consumers have shopped via the mobile phone Eliminating the middle man more and more of the world s largest companies are solely online based Uber, Airbnb, Alibaba, Facebook, Netflix and Google Abacus Property Group June Investor Day 8

9 Retail opportunities Is industrial the new retail? Many local online purchases are still fulfilled from stores but specialist online warehouses are starting to be developed with recent growth having the most benefit for third party logistics platforms Major supermarket chains are now using dark supermarkets. Basically, a supermarket in a warehouse inaccessible to consumers where the staff fulfils online orders Abacus Property Group June Investor Day 9

10 Retail opportunities We believe an opportunity exists to invest in larger neighbourhood and sub-regional retail assets to take advantage of: Assets which provide re-positioning possibilities Assets with inherent or strong potential main trade areas convenience based centres Centres with strong food anchors that have lacked sufficient capital expenditure following the GFC Privately owned centres that have been poorly managed Availability of product Spread between interest rates and cap rates that has widened Spread between prime and neighbourhood which remains wide Chart sourced from JLL Research Abacus Property Group June Investor Day 10

11 Conclusion The market has not yet demonstrated value, however, we can now see opportunities emerge We will not be swayed from property fundamentals which have served us well over many market cycles The contraction by the banks and the impact of APRA has already brought about change which is likely to be heightened in markets over the next year! Furthermore, while interest rates are low, bank margins are increasing! However, the lower for longer hype cannot be ignored although this can change quickly through exogenous events In the NY Real Estate News, Sam Zell recently summed up my concerns well: I think when you talk about interest rates being close to zero for a long period of time, I m very concerned about the fact that we have desensitized our business community to the cost of capital. And we know that the cost of capital ain t free, he said. Every time you defer facing up to the cost of capital, it s going to catch up to you. That I think is the biggest concern. We have distorted markets. Maybe we have bubbles. Then, on second thought, he said, I don t even know what a bubble is, so I wouldn t want to be the definer of it. But I think that we have too much intervention and not enough market movement in interest rates and in other assets. Abacus Property Group June Investor Day 11

12 World Trade Centre, Melbourne VIC Camellia residential projects, Sydney NSW Property ventures Residential land approvals John L Estrange Abacus Property Group June Investor Day

13 Residential pipeline site approvals Our business involves lending to property developers and property investors Project name Invested capital Units / Lots Timeline The business strategy has been to take positions in real estate where we can obtain mortgage security, earn a coupon and share in the upside via a percentage of profits on sale Typically we lend on : Residential unit projects Land subdivisions Rezoning of land We have focused mainly on the Sydney market where the fundamentals have remained sound with demand exceeding supply Campsie, NSW $35.2m 453 FY16/17 Camellia, NSW $144m FY17 Belmore, NSW $11.7m 260 FY17/18 Werrington, NSW $15.5m 391 FY17/18 Riverlands, NSW $144m FY17/18 Settler s Estate, NSW $10.2m 152 FY18 Lane Cove, NSW $7.4m 700+ FY18/19 Marsden Park, NSW $25.0m 1,500 FY18/19 Parramatta: George St, NSW $8.8m 125+ FY18/19 Going forward we see good opportunities as Banks are tightening their lending practices Parramatta: Aird St, NSW $6.7m 100+ FY18/19 We are currently seeing increased deal flow but are not ready to deploy incremental capital until our near term project realisations are effected Grand Ave, Camellia, NSW $17.0m - 1. Camellia and Riverlands Projects are cross collateralised Abacus Property Group June Investor Day 13

14 Campsie project Project sites are located at and Canterbury Rd, Campsie NSW Two adjacent sites located in the inner west region of Sydney, 13km from the Sydney CBD Key metrics Dec 15 Invested capital $35.2m units is 8,351m 2 and is planned for 353 units DA approved for 270 units with a s.96 amendment for a further 83 units Awaiting final letter on s.96 which we anticipate shortly units 105 ABP profit share 50% Offers (gross per units site) $140, , is a smaller site planned for 105 units DA approved for 86 units with a s.96 amendment for a further 19 units Anticipated exchange of contracts H has been recently marketed for sale with expression of interests received in line with our anticipated sale price Anticipate exchange in July 2016 Artist impression Canterbury Rd Campsie, NSW is anticipated to be sold once s.96 is finalised Artist impression Canterbury Rd Campsie, Artist impression NSW of possible residential development Camellia, NSW Abacus Property Group June Investor Day 14

15 Camellia project Project site is located at 181 James Ruse Drive Camellia, Parramatta NSW 6.8 hectares located 23km west of Sydney CBD State Government has recently announced that the light rail will travel past our site at Camellia and includes Westmead, Parramatta, Homebush and Strathfield Remediation plan approved following issue of EPA license Key metrics Dec 15 Invested capital (RCL 1 ) $144.0m Units 3,250 Retail 15,000m 2 ABP profit share 50% Estimated unit sales price $100,000+ Master Plan provides for c.3,250 apartments and 15,000m 2 of retail/commercial Anticipated approval date FY17 Council placed master plan on exhibition in January 2016 for 28 days Final approval has been delayed due to council amalgamations in NSW. The plan is now in the hands of the Council administrator The planning proposal will then be sent to the NSW Department of Planning for gazettal Genuine interest in the site from domestic and international parties 1. Camellia and Riverlands Projects are cross collateralised Artist impression of possible residential development Camellia, NSW Abacus Property Group June Investor Day 15

16 Belmore project Project site is located at Canterbury Rd, Belmore NSW The site is located 800m from Belmore station Site was acquire with an existing DA lodged for 211 units Final purchase price (capped at $24m) will depend upon the ultimate height of the building approved by council Key metrics Dec 15 Invested capital (RCL) $11.7m Units 260+ Retail - ABP profit share 50% Estimated unit sales price $140,000 - $175,000 Anticipated approval date FY18 A planning proposal has been lodged for buildings up to 8 levels Aerial view of Lane Cove site, NSW An approval for circa 260 units is anticipated Gazettal is not expected for another 12 months due to council amalgamations Abacus Property Group June Investor Day 16

17 Werrington project French Road Project site is located midway between Penrith and St Marys in Sydney s Western Suburbs NSW 22.0 ha land subdivision site in the greater Sydney metropolitan area Planning for c.391 housing lots across 4 stages The land is bounded by the western rail line to the north, University of Western Sydney to the east and the Great Western Highway to the south Key metrics Dec 15 Invested capital $15.5m Lots 391 Stages 1 and 2 sold out 138 ABP profit share 25% Land sales price c.$270,000 Cost to prepare lot c.$100,000 Stage 1: Consists of 108 lots of land have been completed and separate titles will soon be issued All blocks sold with settlements anticipated upon title issue in early FY17 Stages 2: 30 lots pre sold Anticipated settlement dates FY17 Aerial view of Lane Cove site, NSW Stages 3 and 4 will deliver c.253 lots Gateway approval has been received and gazettal will arrive within the next few months Stages 3 and 4 will sell once gazettal received Abacus Property Group June Investor Day 17

18 Riverlands project The Riverlands site is located at Milperra, NSW a 35 minute drive to the Sydney CBD 82ha site consists of land suitable for a multi stage residential sub-division The site is located fronting the Georges River, adjacent to the M5 motorway and within an existing residential precinct Working with council for a first stage sub-division on 15 hectares which could accommodate up to 248 larger blocks which will be further subdivided into 450 smaller blocks upon approval We are anticipating further lots being approved as part of stage two once further studies are complete on the remaining land Prices for housing lots have continued to grow over the past few years in this precinct Key metrics Dec 15 Invested capital (RCL 1 ) $144.0m Units/lots Stage 1 (15ha) 450 ABP profit share 50% Estimated lot sales price $400,000 - $500,000+ Estimated cost to prepare lot $120,000 Anticipated approval date H117 Currently with NSW government for gazettal DA can be progressed once gazettal has been received Abacus will look to commence this project with its joint venture partner Will commence a staged land subdivision utilising senior debt finance Aerial view of new Riverlands perspective, Milperra NSW 1. Camellia and Riverlands Projects are cross collateralised Abacus Property Group June Investor Day 18

19 Settlers Estate project Rance Road Project site is located midway between Penrith and St Marys in Sydney s Western Suburbs NSW 4.7ha land subdivision site in the greater Sydney metropolitan area Planning for c.152 small housing lots averaging c210m 2 Key metrics Dec 15 Invested capital $10.2m Lots 152 ABP profit share 50% Estimated land sales price c.$330,000 The land is located 200m from Werrington station We are anticipating approval for the 152 lots via the Land and Environment Court in August 2016 Cost to prepare lot Anticipated settlement dates c.$100,000 FY18 Aerial view of Lane Cove site, NSW Once approved the individual lots will be developed and sold Abacus Property Group June Investor Day 19

20 Lane Cove project Project site is located at 1 Sirius road Lane Cove, Sydney NSW 4.0 ha site 5km north of Sydney CBD Located in an up market location in one of Sydney s more affluent suburbs on the edge of a small isolated industrial precinct and adjoins land recently rezoned to high density residential The site is waterfront to Lane Cove River which flows into Sydney Harbour A 2.0 to 1 FSR is considered achievable under a rezoning for residential and would produce almost 80,000m 2 of GFA for predominantly residential Key metrics Dec 15 Invested capital $7.4m Units 700+ Retail - ABP profit share 50% Estimated unit sales price - Anticipated approval date FY18/19 Aerial view of Lane Cove site, NSW Conceptual design completed for potentially 700 residential units depending on council acceptance A planning proposal has been submitted to Council and has been forwarded to the NSW Department of Planning for consideration Due to council amalgamations we are not expecting that the proposal will progress until a new council election has occurred in 2018 Abacus Property Group June Investor Day 20

21 Marsden Park project Project site is located in Marsden Park NSW in Sydney s Western Suburbs The site is 10 ha. and located in the emerging North West growth corridor The site is zoned R3 allowing medium density Up to 1,500 apartments can be accommodated on the site The loan was originated in March 2016 Key metrics Dec 15 Invested capital $25.0m Units 1,500 Retail - ABP profit share Exit fee upon repayment Estimated unit sales price N/A Anticipated approval date FY18/19 Borrower strategy is to create 10 super lots and to sell individually once gazetted Abacus receives a coupon and an exit fee upon repayment $5m of staged repayments occur over the next 6 months The site is located on a future rail route and adjacent to the future town centre Abacus Property Group June Investor Day 21

22 Future Parramatta rezoning opportunities 107 George Street, Parramatta NSW 55 Aird Street, Parramatta NSW Grand Avenue, Camellia NSW Planning: Seeking rezoning to residential Anticipate 125+ units 50/50 Joint venture with local developer Anticipated timeline of FY18 Long term redevelopment opportunity Planning: Seeking rezoning to residential Anticipate 100+ units 50/50 Joint venture with local developer Anticipated timeline of FY18 Long term redevelopment opportunity 3.2ha residential rezoning opportunity near Parramatta, Sydney NSW Located in the regeneration area of Camellia Acquired at ~$445pm 2 which should generate c$5,000pm 2 upon rezoning The Camellia precinct will require extensive infrastructure work to be completed as part of the regeneration of the precinct Hence this is a long range opportunity and the rezone could take between over 5 years to achieve Abacus Property Group June Investor Day 22

23 Property ventures Residential developments Cameron Laird Erskineville residential projects, Sydney NSW Abacus Property Group June Investor Day 23

24 Residential development exposure Abacus has development exposure in Sydney, Melbourne, Brisbane and Canberra. Our developments are in desirable locations and incorporate quality architectural designs. All of our projects have Town Planning approvals in place. The committed projects are now 93% sold and all of our projects have met the requirements for senior banking, except Erskineville which only needs 6 more sales. Our construction is contracted on a design build basis with limited scope for variation of cost. The projects have started construction or programmed to start construction over the next month. 1

25 Australia: Population Growth In recent years, Australia has had one of the highest population growth rates in the western world (1.5% annually). Over the last decade, Australia s population growth rate was more than twice the average of Organisation for Economic Co-operation and Development (OECD) member countries. Australia s population growth has traditionally averaged around 240,000 persons per annum (see Chart). Since around 2006, however, Australia s population growth has increased substantially to above 300,000 persons per annum. Source: LocationIQ 2

26 State: Population Growth The eastern seaboard, comprising Queensland, New South Wales and Victoria, accounts for the majority of growth within Australia, with each growing at between 65,000-75,000 persons over the past 20 years. NSW and Victoria now fastest growing states at over 1.4% annually with focus of growth in capital cities of Sydney and Melbourne. Queensland growth currently well below long term trend. Source: LocationIQ 3

27 Local Demand Drivers SYDNEY BRISBANE MELBOURNE Gross State Product The New South Wales Gross State Product was recorded at $506,918 million in the year to June 2015; 2.4% greater than the prior year. The Queensland Gross State Product was recorded at $300,270 million in the year to June 2015; 0.5% greater than the prior year. The Victorian Gross State Product was recorded at $355,580 million in the year to June 2015; 2.5% greater than the prior year. Unemployment Unemployment as at March 2016 stood at 4.8% for Greater Sydney (SA4), trending 10 bps higher than the 4.7% recorded in March Unemployment as at March 2016 stood at 5.7% for Greater Brisbane (SA4), trending 100 bps lower than the 6.7% recorded in March Unemployment as at March 2016 stood at 5.6% for Greater Melbourne (SA4), trending 70 bps lower than the 6.3% recorded in March Population growth The estimated population of Greater Sydney in 2015 was 4.9 million persons. Greater Sydney experienced 1.7% population growth in the year to June The estimated population of Greater Brisbane in 2015 was 2.3 million persons. Greater Brisbane experienced 1.6% population growth in the year to June The estimated population of Greater Melbourne in 2015 was 4.5 million persons. Greater Melbourne experienced 2.1% population growth in the year to June source: Knight Frank

28 Offshore Demand Drivers Risk mitigation is the number one reason Chinese investors are looking outside of China. Offshore demand is directed to countries exhibiting stable governments, robust economies, top class educational institutions and favourable residency programs. source: Investorist 5

29 Residential development projects Current completion programme The Prince, Kingston, Canberra ACT Apartments: 152 Settlements: August 2016 Project name Invested Units or capital Lots/Sold Timeline Quay Street, QLD $8.8m 78/74 FY16 The Prince, ACT $3.0m 153/151 FY17 Bouquet Street, QLD $33.7m 274/271 FY17 Spice, 25 Bouquet Street, South Brisbane QLD Apartments : 277 Settlements: Sept/Oct Queensberry Street, Melbourne VIC Apartments : 193 Settlements: June 2017 Queensberry Street, VIC $12.6m 193/193 FY17/18 Ashfield Central, NSW $8.4m 101/96 FY17/18 1A Erskineville, NSW $19.7m 176/120 FY18 Merivale, QLD $23.3m 472/449 FY18 Hawthorn, VIC $2.8m 28/0 FY18/19 Liverpool Plaza, NSW Virginia Park, VIC Mina Parade, QLD 6

30 Project settlement chart 7

31 Settlement Process Overview In recent months, there has been increasing discussion on when the Australian residential market will peak. The underlying market fundamentals remain solid, but it is prudent to understand the impact future market changes may have on settlement risk and what steps can be taken to mitigate this risk. Our residential development projects have less than 20% of offshore buyers. Leading up to settlement, our customer care team will engage with the parties and start the process of: Communication with agents and purchasers: Development progress update Information package on the settlement process Financing solutions and options Valuations Quality of Product Inspection Presentation of pre-settlement Assistance with the finance process 8

32 111 Quay Street, Brisbane, QLD Background This is a JV project with local developer, Kilcor Properties. Quay Street is located in Inner City Brisbane and close proximity to the city centre, Caxton Street and Milton Street The project consists of 78 residential 1&2 bedroom apartments in a 12 storey building above a 3 level carpark The site settled on 14 February 2014 Status 63 of the 78 apartments have settled 11 are under contract and not yet due to settle 4 units remain available for sale Hutchinson Builders completed construction in December

33 THE PRINCE, Kingston, Canberra ACT Background This project is a 50/50 JV with local developer, Crafted Group. This residential development is located in the affluent mixed use Kingston Foreshore precinct, overlooking Lake Burley Griffin. The project consists of 152 residential apartments over 6 storeys in four buildings. Status 151 apartments have been sold to local owner occupiers or investors The Development Application was approved in February Construction commenced by Chase Builders in April 2015 and completion is due ahead of schedule in August

34 SPICE, 25 Bouquet Street, Brisbane QLD Background This is a Loan Agreement to Kilcor Properties. The site was settled in December The project consists of 274 residential units in two 15 storey towers above a 4 level carpark plus 4 commercial retail tenancies. The Management rights will be sold Status CBRE and Ironfish have sold 271 of the 274 units. Hutchinson Builders commenced construction in December 2014 with completion anticipated in September

35 THE EMINENCE, 139 Queensberry St, Melbourne VIC Background This is a JV between Abacus (50%), Lechte (25%) and Crema (25%). The site settled in June The project is in close proximity to the CBD, Melbourne University, Royal Melbourne Hospital and the restaurants of Lygon Street. The site measures 1,480sqm and development approval for193 apartments over 15 stories and 2 retail tenancies on the ground floor. Status The wholesale launch started in February 2014 and the retail launch in July All apartments have been presold. Our JV partner Crema are the builders. Construction commenced in September 2015 and is due to be complete in June

36 22-28 Merivale Street, Brisbane QLD Background This is a JV project with developers CDL, from Singapore and local QLD developer Kilcor Properties. The project site is located in South Brisbane which is 750m from the CBD, a short walk from South Bank, Brisbane s cultural precinct, and West End s retail. The development consists of 472 residential units in 2 stages in 2 high rise 26 storey towers set atop a 10 level parking structure, plus 2 retail tenancies on the ground floor. The Management rights will be sold. Status The site settled in May 2015, DA approval was obtained in June units have been sold to date comprising of 242 units in Ivy and 207 units in Eve to a strong mix of local owner occupier and investors and overseas investors Hutchinson Builders started with construction in Oct 2015 with anticipated completion of Ivy in Dec 2017 and Eve in Feb

37 1A Coulson Street, Erskineville, NSW Background This project is a 50/50 JV with local developer, The Linear Group The property is located approximately 5km South-West from the Sydney CBD The proposal is to develop an existing industrial site to accommodate approximately 175 residential apartments Status The Development Application has been approved and a Section 96 is being submitted on the 1st June 2016 Sydney Water has approved our application to divert the stormwater culvert Sales commenced in October 2015 and 120 apartments have been sold to owner occupiers, local and foreign investors Richard Crookes Construction have been appointed to undertake the early works package, demolition started Mid-May and the main construction package is being finalised. Completion is expected in early

38 Ashfield Central, Ashfield NSW Background This is a 100% developed and owned Abacus project. The Ashfield Mall is located on Liverpool Road approximately 150m from the Ashfield Station and 12km West of the Sydney CBD. Located in Ashfield, one of Sydney s most sought after locations adjacent to Ashfield Mall and across from the train station. Ashfield Central is in clos e proximity to vibrant laneway food options, transport, prestigious schools and shopping Planning approval was obtained to build 101 residential apartments across two buildings Status Town Planning approval was achieved in Sept The marketing and sales of this development commenced in November 2015 with 96 apartments sold to date. Ceerose have been appointed to undertake the construction of the 101 apartments commencing in June

39 Macquarie and Moore Streets, Liverpool Plaza, Liverpool NSW Background: Site combines two small properties Abacus owns adjoining our existing retail asset Liverpool Plaza. Development options have been assessed following recent LEP changes and the site is being promoted as a mixed use development site Development Status Town Planning: 1. Rezoning metre mixed-use planning application accepted by council 2. Planning Application now lodged with NSW Government (Gateway) for approval 3. Development Application Anticipate lodgement Q Development Plan Residential: Car parking: Com/Retail: Residential Tower 134 residential apartments serviced apartments 207 new car bays, with 130 on the plaza and balance under residential tower 3,000sqm of commercial and retail space including a place childcare centre above retail. 16

40 Virginia Park, Bentleigh East, VIC Background This project is a 50/50 Joint Venture with the Gillon Group. Virginia Park is a business park located in Bentleigh East in Melbourne s south east approx. 18km from Melbourne CBD. The site measures 12.34ha and has an NLA of 58,560sqm of industrial and office buildings and 1,500 car parks. The GAT site added 4.0ha to the site area Tenants within the buildings include major Australian groups The facilities include a gym, swim centre, childcare centre and café. Status A new Master Plan design has begun on the future of the site into a retail, office and residential development An extensive community and stakeholder engagement process has commenced with the goal of finalising a preferred masterplan for the site and submitting a formal amendment request early

41 95 and 117 Mina Parade Alderley, QLD Background This asset has been 100% owned Abacus property since 2007 The asset has delivered strong rental income while a development plan was finalised and tenants were moved onto leases with demolition clauses The site is 4.6ha and comprises of office/warehouse buildings All leases at 117 Mina Parade, which takes up 75% site coverage, have demo clauses 95 Mina Parade is leased to Boeing, who have 18 months to go of the first 5 year term with a 5 year option. Status The proposed development is for circa 350 products made up of 51 townhouses, 290 apartments, plus 10 attached and detached houses. We have completed the Community Consultation and will be lodging a Development Application in the second half of the year 18

42 95 and 117 Mina Parade Alderley, QLD Alderley is an established inner city residential suburb of Brisbane located approximately six kilometres north of the CBD This property is located between 2 railway stations and is close to retail amenities, schools and sporting facilities. 19

43 Investment portfolio Retail Gerard McSpadden Abacus Property Group June Investor Day Oasis Shopping Centre, Broadbeach QLD

44 Asset summary Site : 2.2 hectares Market Valuation : $167,500,000 (@ 30 December 2015) Capitalisation Rate : 6.25% Car parks : 1,070 (4.3 : 100sqm) GLA : 24, sqm 7.6% Occ Cost (30 April 2016) MAT: $186 million Majors : 15, sqm MAT : $125.7m ($117.9m) +7% on prior year Mini Majors : 1, sqm Specialties : 7, sqm Specialty growth(prior Year): Gross Rent : $1,182 /sqm ($766/sqm) Sales : $8,297/sqm ($5,335/sqm) Vacancies : sqm or 2.2% Major Retailer Lease Expiry Woolworths* June ,000 sqm Coles Nov ,265 sqm Kmart** June sqm Aldi Aug , sqm Note: * Woolworths exceeding sales threshold ** Kmart exceeding sales threshold 2

45 Demographic profile Customer: Average age 38 years old, 3% above Sydney average Living as a couple with children A range of nationalities represented including Chinese, Italian and Indian Higher than average income levels household income 3% above Sydney average Works fulltime in a professional or managerial role 29.5% have a bachelor degree or higher this is 9.5% above Sydney market Trade Area: TTA 513,710 PTA 57,170 MTA 159,450 3

46 Asset strategy Strategic Outcomes : Position Ashfield Mall as a quality food and convenience offer for the Inner West Centre ambience upgrade to positively reposition customer perception, eg Forecourt / signage Refresh the Leasing Strategy to continue improving the overall retail offer within the centre, particularly food and services Strengthen the Fresh Food offer, to better support c$110m in Supermarket sales Improve the café and restaurant offer to align with the new professional demography Maximise retail spend for the asset through engagement with the new/increased residential 4

47 Ashfield Mall development projects Development Application approval: Residential building 101 apartments 3 retail food premises Additional Retail Increased L2 retail GLA Asian food precinct New entry L3/L4 Childcare / Gym Forecourt 120 place childcare centre 700 sqm 24 hour gym New alfresco dining Contemporary finishes New pylon signage 5

48 Ashfield Mall Sales growth 6

49 Ashfield Mall Sales growth 7

50 Lease expiry profile 8

51 Asset summary Site : 8,904 sqm Market Valuation : $41,500,000 (@ 30 December 2015) Cap Rate : 7.5% Car parks : 215 (3.5 : 100sqm) GLA : 6, sqm 17.4% Occ Cost (@ 30 April 2016) Majors : 1, sqm Specialties : 4, sqm Gross Rent $900/sqm & Sales $3,657/sqm Vacancies : sqm or 7.5% Major Retailer Lease Expiry Aldi Oct ,500 sqm 9

52 Demographic profile Customer: Largely multicultural customer base 46.2% of customers in TTA were born overseas Median age 33 years reflecting large proportion of families Key occupations include: Clerical & Administrative worker 17.5% Technicians & Trade Workers +15.7% Professionals +15.4% Laborers 10.5% Machinery operators and drivers 10.5% Customer Spending: Food and liquor represents the largest expenditure market at $1.3billion annual representing 46.6% of total retail spending in trade area Trade Area: TTA 227,420 including 52,450 in PTA. 10

53 Asset strategy Strategic Outcomes : Deliver an interesting CBD retail offer including dining and fast food in addition to a full convenience supermarket and fresh food offfer Capitalise on Council s Macquarie Street Mall refurbishment program ($10m) to attract higher quality tenants to the centre, with particular focus on Café and dining precinct Continue to engage with Council and State Government on the rezoning on Moore / Macquarie St properties, to deliver a mixed use planning approval Maximise retail spend for the plaza through engagement with the growing CBD businesses, universities and hospital / healthcare precinct 11

54 Asset summary Site : 43,969 sqm Market Valuation : $54,000,000 (@ 30 December 2015) Cap Rate : 6.75% Car parks : 679 (4.5 : 100sqm) GLA : 15,035.97sqm 6.9% Occ Cost (@ 30 April 2016) Majors : 5, sqm Mini Majors : 1, sqm Specialties : 4, sqm Gross Rent $346/sqm & Sales $1,783 / sqm** Vacancies : 2, sqm or 17.89% (following refurbishment programme) Major Retailer Lease Expiry Coles* Nov , sqm Target* Nov sqm (as per the new Lease) Aldi* Nov , sqm (as per the new Lease) Note: * Coles new Lease is in final documentation stages. 15 year term from March 2016; Base Rent $1,805,400 pa ($408 psm pa); * Target Renewal and Variation of Lease is in final stages; A 5 years option is included in VOL; * Aldi has completed premises expansion (226.6 sqm upsize) ** not annualised majority of trading specialties have been open for < 6 months Deals being negotiated on all existing vacancies 12

55 Demographic profile Customer: MTA is younger than VIC non metro average with average age of 37 vs benchmark of 40.1 years. Much lower than average proportion of residents aged 60 years and above. Higher than average proportion of traditional families comprising couples with dependent children. Trade Area: MTA 18,770 with current growth rate of 2.2%. F/cast population : +2.1% 2.4% between

56 Asset strategy Strategic Outcomes : Continue to reposition The Village as The convenience shopping destination for all residents of Bacchus and the Primary Trade Area Finalise the expansion and full refurbishment of the Coles Supermarket premises Deliver the Project Leasing Strategy, ensuring all key retail categories are represented : fresh food offer, fashion and general merchandise, fast food and casual dining (café and restaurant), medical and general services (including further allied / medical services, phone, internet, fitness, beauty and health services) Deliver the Coles Express Service Station project, increasing customer visitations 14

57 Development projects Post redevelopment Prior redevelopment Coles Express Service Station 15

58 Development projects Development Update Lessor works completed September 2015; Specialty leasing continues ; Delays in Coles fitout works due to Coles internal issues. The Coles works now under construction and to be completed by the end of New pad site Coles Express is due to open 21 July with 240k net rental. 16

59 Asset summary Site : 21,160sqm Market Valuation : $120,000,000 (@ 30 December 2015) Cap Rate : 7.5% Car parks : 1,245 (5.6 : 100sqm) GLA : 22,337.80sqm 12.2% Occ Cost (@ 30 April 2016) Majors : 3, sqm Mini Majors : 1, sqm Specialties : 11, sqm Gross Rent $942/sqm & Sales $6,035/sqm Vacancies* : 4,947.30sqm or 22.3% Major Retailer Lease Expiry Woolworths Nov , sqm Note: * Suite 2.22 Allianz (2,100sqm and $425/sqm) and Shop 1.50 Choice Homewares (575sqm and $452/sqm) LOO & LAF signed, and Leasing documentation being finalised Vacancy rate will significantly improve with the execution of both Allianz and Choice Homewares Leases 17

60 Demographic profile Customer: Two distinct markets locals vs tourists Local market key market segments: Aged 60+ Aged Aged Average age 40.3, higher than both QLD and Australian averages Customer Spending: MTA generates $1.3billion in retail expenditure forecast to grow at a rate of 4.2% pa until 2026 Tourist Market spends $4.9 billion in the GC regional annually. Per capita retail expenditure in MTA is +6.4% greater than QLD average Trade Area: MTA 103,480 forecast to grow at 1.2% pa until 2026 Tourist Market 11 million visitors to the GC annually 18

61 Asset strategy Strategic Outcomes : To create a shopping precinct with three distinct offers : Oasis Retail : providing a Ground Floor food and convenience offer and a Level 1 eclectic retail offer Oasis Dining : a contemporary mix of quality national and local operators servicing all cuisines Oasis Commercial : quality office space, delivered with it s own identity Deliver a positive shift in longstanding poor customer perception of Oasis through project delivery, quality management and targeted marketing initiatives and campaigns Achieve additional asset value through the potential removal of the monorail Work closely with GC City Council to identify further opportunities for Broadbeach Mall 19

62 Development projects Development Updates: Project 1 New NW building façade completed December 2015 New tenants moved in: CBA, Hatch & Co and Loose Moose Pedestrian Brigade demolition completed April 2016 Project 11 New Allianz tenancy 2,100 sqm leased on level 2 Handover in May 2016 Project 3A New restaurant precinct (5 new F&B tenancies) New awning and entry statement to be completed early

63 Development projects - New NW centre façade & New tenants 21

64 Development projects - Project 3A, New restaurant precinct 22

65 Asset summary Site : 21,946sqm Market Valuation : $65,000,000 (@ 31 October 2015) Cap Rate : 7.25% Car parks : 812 ( 4.3 : 100sqm ) GLA : 18,891.10sqm 9.1% Occupancy Costs (@ 30 April 2016) Majors : 5, sqm Mini Majors : sqm Specialties : 9,454.50sqm Gross Rent $621 /sqm & Sales $5,678 /sqm Vacancies : 3,392.60sqm or 17.95% Major Retailer Lease Expiry Coles Mar , sqm Aldi Oct , sqm (as per the new Lease) 23

66 Demographic profile Customer: 46.9% of households in MTA are traditional families Average age 35.7 years in MTA. Secondary East TA slightly older at 37.7 years. Higher than average proportion of year olds Lower than average proportion of children Lower than average proportion of residents aged 60+ Customer Spending: Spend per capita in all key retail categories is above Brisbane average Spend per capita in Food Catering, Retail Services and Apparel categories is exceptionally high against Brisbane average: Trade Area: Food Catering +30% Retail Services +35.1% Apparel +31.4% MTA 57,360 growing at 1.4% pa. (between ) 24

67 Asset strategy Strategic Outcomes : To reposition the centre to dominate it s Primary Trade Area for the convenience shop Identify and deliver management, marketing and operational improvements to the centre, enhancing customer experience, traffic flow and sales performance Development planning to identify and maximise all value add opportunities: Potential for additional supermarket and improved food / convenience offer Expanded commercial space Centre ambience upgrade to positively reposition customer perception Improve the café and restaurant offer to align with the expanded office space Introduce paid parking to improve available parking and remove commuters 25

68 Early concepts 26

69 Investment portfolio Office and Industrial Peter Strain 710 Collins Street, Melbourne VIC Abacus Property Group June Investor Day 25

70 710 Collins Street - Melbourne VIC Abacus acquired 710 Collins Street for $76.5 million in December Collins Street is an iconic, boutique office building located in Melbourne s fastest growing commercial precinct and adjoins two large commercial mixed use developments The building consists of a four level commercial building with access to Collins Street which provides access to the two level converted historic goods shed Property provides strong security to income with high quality Government tenants on long leases Key metrics Dec 15 Rate per square metre at acquisition $6,800 Cap rate 6.25% NLA (sqm) 11,235m 2 WALE (yrs by income) 8.25 yrs Occupancy (% by area) 100% Average rent psqm $449 The A grade property was recently refurbished and provides a high quality, state of the art accommodation and services The property also provides a opportunity to explore further development opportunities via an extension of the buildings office tower or a redevelopment of retail We have been reviewing planning changes proposed for the area and are confident our preliminary concept of a smaller scale development of circa 30-40,000m 2 should be considered a real possibility Abacus Property Group June Investor Day 26

71 World Trade Centre - Melbourne VIC Abacus acquired a 70% interest in Towers 2, 3 and 4 of the World Trade Centre, Melbourne (WTC) for $120 million in a 25/75 joint venture with KKR in December 2014 on a 9.3% initial yield The vendor, Asset 1 WTC, maintained a 30% co-ownership The property is a part of the Northbank precinct adjacent to the central business district, one of Melbourne s largest integrated waterfront mixed-use developments, which has been transformed into a vibrant commercial, retail, and residential precinct Property was acquired on a low rate per square metre and provides opportunities for refurbishment and development, including the creation of additional NLA Key metrics Dec 15 Rate per square metre at acquisition $3,446 Cap rate 8.00% NLA (100%) (sqm) 49,887m 2 WALE (yrs by income) 4.4 yrs Occupancy (% by area) 99% Average rent psqm $330 The property is located in an area that is undergoing strong regeneration which should underpin rental growth and occupancy Since acquisition, occupancy has increased to 99% from 90% We are currently in a review process with the Victorian Police, who lease c.23,000m 2 with hopes of retaining them post 2020 There are alternative options in the area for the police, but the floor plates size and layout provide good options for alternate users as was demonstrated in Tower 4 which was leased up quickly post Police vacating Abacus Property Group June Investor Day 27

72 201 Pacific Highway - St Leonards NSW Abacus Property Group has an exclusive dealing period in respect of 201 Pacific Highway, St Leonards at a price of $115.0 million 50/50 joint venture with Goldman Sachs Acquisition price compares favourably when marked against recent market transactions Opportunity to acquire a near new, well leased office building at a relatively high cap rate (8.5% on passing and 8.9% on fully leased) Exploit over time the yield differential between the core CBD and suburban markets Key metrics Dec 15 Rate per square metre at acquisition $6,957 Cap rate 8.50% NLA (sqm) 16,529m 2 WALE (yrs by income) 3.0 yrs Occupancy (% by area) 97% Average rent psqm (office) $680 This A grade building comprises 13,841m 2 of office and 2,688m 2 of retail and 262 car spaces The retail comprises 20 tenancies in the Forum plaza adjoining the railway station Asset presents a diversified income with 20% of the income from retail (anchored by Coles) and 10% from car parking The plans to strata subdivide the retail has now been lodged with council Anticipate strong demand for strata lots upon approval We have lease proposals out on upcoming office vacancy of two floors with HOA issued over 50% of available space Abacus Property Group June Investor Day 28

73 169 Australis Drive - Derrimut VIC Abacus acquired 169 Australis Drive in December 2013 for $21.0 million Site is located in one of Melbourne s fasted growing and well regarded industrial suburbs 16km west of the Melbourne CBD The site has good access to major transport highways and ring roads and is surrounded by a number of other high quality industrial estates The warehouse was built in August 2013 and consists of a single story office and high bay warehouse Leased to three tenants on staggered lease profiles Key metrics Dec 15 Rate per square metre at acquisition $678 Cap rate 7.75% GLA (sqm) 30,944m 2 WALE (yrs by income) 1.7 yrs Occupancy (% by area) 100% Average rent psqm $55 The site represented good value and had a short WALE Under-renting on the existing leases presented an opportunity to mark to market the leases upon expiry The configuration can be split into four tenancies or consolidated into one providing expansion opportunities for existing tenants We are currently in negotiations with Hitachi for a potential lease renewal Abacus Property Group June Investor Day 29

74 Westpac House - Adelaide SA Abacus acquired a 50% interest in Westpac House in October 2004 for $51 million The asset was acquired at a very low rate per m 2 Westpac House at 91 King William Street is a premium grade commercial property located in central Adelaide with three street frontages The property comprises a 31 level office tower and two smaller adjacent office buildings Key metrics Dec 15 Rate per square metre at acquisition $3,300 Cap rate 7.75% NLA 31,449m 2 WALE 3.1 yrs Occupancy 86% Average rent psqm $535 Abacus acquired Arena s 50% ownership in September 2014 for $74 million 100% ownership un-complicates the asset and provides cost synergies We are currently in discussions with the SA Government regarding an extension of the ~10,000m 2 beyond their expiry in 2021 Recently renewed the lease to Westpac for a further 6 years Refurbishment to end of trip facilities and ground floor lobby are currently proposed Abacus Property Group June Investor Day 30

75 Westpac House Planned improvements Abacus Property Group June Investor Day 31

76 51 Allara Street - Canberra ACT Abacus acquired Allara St in January 2008 for $52.6 million The property was leased to three major tenants in the ATO, EY and Murray Darling Basin Commission This eight level office block is centrally located on the intersection of Constitution Avenue and Allara Street in the Canberra CBD, which is the centre of a major government office precinct The property was substantially refurbished in 2000 and 2010 The property has undergone a major refurbishment and increased the buildings NABERS rating to 5.0 Stars Provided 163 car parks Key metrics Dec 15 Rate per square metre at acquisition $4,350 Cap rate 8.25% NLA 12,088m 2 WALE 4.2yrs Occupancy 100% Average rent psqm $ lease signed by Government department for 10 years Department of Resources, Energy and Tourism have taken over 8,000 m 2 Murray Darling Basin Commission leases the remaining office space Abacus also created a corporate childcare facility within the property of over 750m 2 for over 50 children, increasing the assets attractiveness to tenants We are discussing with Murray Darling Basin Commission regarding lease expiry in 2017 renewal terms Abacus Property Group June Investor Day 32

77 14 Martin Place - Sydney NSW Abacus and the Kirsh Group acquired 14 Martin Place, Sydney in December 2010 for $95.0 million on an initial yield of circa 8.0% 14 Martin Place is located in a prime corner position in the centre of Sydney s prestigious Martin Place financial precinct consisting of 8 level heritage façade commercial office building, built in circa 1892 that fronts Martin Place; and an interconnecting 20 Level commercial office tower fronting Pitt Street Total NLA of 13,138m 2 including 1,853m 2 of ground and lower ground floor retail Key metrics Dec 15 Rate per square metre at acquisition $7,232 Cap rate 6.4% NLA (sqm) 13,136m 2 WALE (yrs by income) 2.7yrs Occupancy (% by area) 92% Average rent psqm $722 Precinct is currently undergoing a huge refurbishment with numerous properties subject to major redevelopments We are at the end of a major retail refurbishment programme with new tenants/leases including MJ Bale, Joe the Juice and Long Chim Restaurant The building is almost fully leased as a result with only a few small suites available Abacus Property Group June Investor Day 33

78 14 Martin Place: development opportunities 14 Martin Place, Sydney NSW Works completed to date include a restoration of sections of the façade Protecting the heritage nature of the property while maintaining A Grade status 14 Martin Place Ground level Finalising works remixing the retail tenancies Reconfigured space and tenancies to improve tenant quality and revenue sustainability Redevelopment of 550m 2 lower ground floor retail space fronting Angel Place Lease signed with Award winning restaurant Long Chim out of Singapore with celebrity chef David Thompson Works completed in March 2016 with tenant DA now approval expected opening in August 2016 WALE improves to 3.5 years 14 Martin Place Lower ground level 33 Queen Street, Brisbane QLD Redevelopment of 230m 2 retail space on ground floor facing Pitt Street heads of agreement signed with international café group, Joe the Juice, on a 10 year lease Total development spend c.$3.5 million targeted delivery of c.8-10% return on cost Abacus Property Group June Investor Day 34

79 14 Martin Place: development opportunities Long Chim Restaurant example of fit out 33 Queen Street, Brisbane QLD Long Chim Restaurant example of fit out Abacus Property Group June Investor Day 35

80 33 Queen Street - Brisbane QLD Abacus acquired 33 Queen Street, Brisbane in May 2013 for $34.0 million on an initial yield of circa 9.4% Located on the corner of Queen Street Mall and George Street, 33 Queen Street has an unrivalled location on one of the CBD s most high profile corners The property consists of two integrated buildings 33 Queen Street, a historic 7 level building and 199 George Street a recently constructed (2008) modern office and retail tower Key metrics Dec 15 Rate per square metre at acquisition $5,600 Cap rate 8.50% NLA (sqm) 6,035m 2 WALE (yrs by income) 2.1 yrs Occupancy (% by area) 56% Average rent psqm $615 Westpac Bank recently vacated on expiry Space presents well to large format retail which has struggled in this end of the mall, although Queens Wharf project will drive demand in this area in the near future, however we have leased to Chemist Warehouse Group for 6 years while the project progresses Recent refurbishment strategy will repositioned the building via a staged subdivision of larger floor plates into smaller and more adaptive spaces for a mix of small operators ranging from m 2 in size Utilising similar strategy used with 180 Queen Street to drive higher rents Abacus Property Group June Investor Day 36

81 33 Queen Street refurbishment strategy Example of refurbishment strategy and floor break up across adjoining floor plates of both buildings Abacus Property Group June Investor Day 37

82 33 Queen Street refurbishment strategy Pre-refurbishment Post-refurbishment Abacus Property Group June Investor Day 38

83 Heitman joint venture This joint venture with Heitman was set up in 2011 Asset Date Acquired Sold IRR 1 The venture acquired 5 high quality assets with combined purchase prices of $205m between June 2011 to August St Kilda Road, bought for $68m in December 2011, was sold in September 2014 for $94m The achieved equity IRR on the project was 24% Abacus IRR was 34% Wharf 10, Pyrmont, bought for $31.8m in August 2012, was sold in March 2015 for $42m The achieved equity IRR on the project was 26% Abacus IRR was 40% 32 Walker Street, Sydney NSW 484 St Kilda Rd, Melbourne VIC 35 Boundary Street, Brisbane QLD 180 Queen Street, Brisbane QLD Wharf 10, Sydney NSW June 2011 $35.6m - - Nov 2011 $68.0m $94.0m 34% July 2012 $40.3m - - July 2012 $29.5m - - August 2012 $31.8m $42.0m 40% The remaining three assets are likely to be sold over the coming years as the joint venture concludes 1. IRR is Abacus Property Group Equity IRR including all fee s 484 St Kilda Road, Melbourne VIC Abacus Property Group June Investor Day 39

84 Heitman JV Remaining assets Key metrics 32 Walker Street, Sydney NSW 180 Queen Street, Brisbane QLD 35 Boundary Street, Brisbane QLD Cap rate 7.0% 7.75% 8.0% NLA (sqm) 6,569m 2 3,507m 2 8,121m 2 WALE (yrs by income) 3.3yrs 3.2yrs 2.9yrs Occupancy (% by area) 100% 90% 87% Average rent psqm $477 $1,133 $421 Abacus Property Group June Investor Day 40

85 Investment Portfolio Self Storage Phil Peterson 710 Blacktown Collins facility, Street, Sydney Melbourne NSWVIC Abacus Property Group June Investor Day 41

86 Portfolio Update Investment in self storage sector commenced in 2005 Initial portfolio with 16 properties & approx. $100m in assets Portfolio comprised 59 assets and Dec-15 Further 3 assets secured during H2 (2 existing stores and one industrial property for conversion) valued at approx. c$25m. H1 announced 5 assets for c$43m (3 existing or converted stores and 2 new conversion projects) Facilities branded Storage King the largest brand in Australia and New Zealand with 150 stores Portfolio has performed well and delivered strong cash flow Like for like portfolio comprises 46 properties net property income approx. 6% p.a. on prior period Long term average approx. 4% p.a. Total portfolio rental yield up to $257psm and 86.2% => REVPAM $222 (FY16 YTD ave) Total portfolio (ex 5 new stores in let up) Ave rental $259psm and 87.0% => $225 Active strategies to drive rental growth store by store Abacus Property Group June Investor Day 1

87 Storage portfolio overview Geographic diversity by NLA ACT 10% VIC 28% Geographic diversity by NLA Auckland 14% Regional NZ 6% Canberra 10% NZ 21% Regional QLD 7% Sydney 21% Regional VIC 4% QLD 20% NSW 21% Brisbane 13% Melbourne 25% Asset net lettable area (m 2 ) split by number of assets 7% 5% Asset net lettable area (m 2 ) split by value 12% 13% 33% 48% % % Abacus Property Group June Investor Day 2

88 Sector analysis cap rate movement Equivalent Yields for Major Aus & NZ Transactions (Freehold) SINCE 1 JULY % 11% 10% 9% 8% 7% 6% Nov-13 Mar-14 Jun-14 Sep-14 Dec-14 Apr-15 Jul-15 Oct-15 Jan-16 May-16 Source : Urbis Equivalent Yield Trendline (Equivalent Yield) Abacus Property Group June Investor Day 3

89 Storage Portfolio overview Portfolio will consists of: 52 stabilised storage assets 5 newly converted assets with a further 2,100m 2 of undeveloped but planned NLA 5 assets with future conversion for 21,600m 2 of NLA Portfolio total customers approx. 24,000 Average stay per customer of almost 36 months 5 converted stores with completed stages, as at April 2016, are averaging 76.1% occupancy after 16 months of operation Market rates suggest average rental rate of c.$270psqm achievable Current pipeline of approved and unapproved stages will deliver an additional ~26,300m 2 of NLA over the next two years Includes new and existing asset expansion projects Average return on cost on new and future conversions should hit c.11% inclusive of acquisition costs 2,600m 2 of existing site expansions should yield average 20% return on cost Abacus Property Group June Investor Day 4

90 Portfolio value compound growth of 12.5% pa Storage portfolio: $550 million portfolio by 30 June Dec-12 Jun-13 Dec-13 Jun-14 Portfolio size ($m) Dec-14 Jun-15 Portfolio size (no. of assets) Dec-15 Jun-16 (f) Abacus Property Group June Investor Day 5

91 Total revenue compound growth of 4.0% pa Storage portfolio: $550 million portfolio by 30 June ,100 Total Revenue (monthly) (Life For Like stores) 1 4,000 3,900 3,800 3,700 3,600 3,500 3,400 3,300 3,200 3,100 3, Includes 41 like for like stores held since July 2008 Abacus Property Group June Investor Day 6

92 Growth opportunities Scope to leverage existing portfolio and grow platform Organic growth from existing portfolio yield, occupancy plus margin Optimise REVPAM through balance between occupancy and rental yield levers Acquire stores existing/operating storage facilities FY16 acquired freehold stores with focus on metro markets Transactions include two in Brisbane, one Melbourne and one Auckland increasing platform by approx. 24,000 NLA sqm Auckland acquisition at St Lukes NZ$11m Purpose built facility with expansion potential for additional units to maximise NLA Abacus portfolio now has 12 assets in NZ with 8 high quality facilities in key Auckland market Abacus Property Group June Investor Day 7

93 Growth opportunities Develop new stores Acquire suitable land OR existing industrial properties and convert to new storage facilities Leverage access to industrial property opportunities with storage skills to develop and grow portfolio Since Jun 2014 Abacus has added 5 stores to the platform and fitted out approx. 14,000 sqm (includes 4 stores in Sydney metro area) with further c2,100sqm to complete Current development pipeline includes an additional 5 stores and NLA potential approx. 21,000sqm (fully developed) 3 to be completed during FY17 (includes 1 store in Sydney and 2 in Melbourne) Abacus Property Group June Investor Day 8

94 Growth opportunities Case study Macquarie Park, Sydney (NSW) Property acquired from mortgagee in possession for $5.0M with GFA of c5,000sqm ($1,000psm) Property backs on to Lachlans Line high density residential mixed use precinct and new train station under construction High yield catchment in Sydney with proximity to growth in high density residential, retail and Macquarie University DA to convert existing improvement approved in May, which will generate approx. NLA 4,000sqm Anticipate average rental rate to exceed portfolio average Long term potential for rezoning to high density residential Abacus Property Group June Investor Day 9

95 Growth opportunities Abacus Property Group June Investor Day 10

96 Growth opportunities Case study South Oakleigh, Melbourne (VIC) Property acquired for $3.450 with GFA 3,576 (rate $965psm) and site 6,782sqm. Tenant in place short term generating cash flow while DA approval was obtained Good clearance in warehouse allows fit out of new mezzanine floor plus surplus land to be used for external/drop down units Storage property developed will generate NLA c4,500sqm plus front office tenancy 500sqm on Clarinda Road Office tenancy to be stripped out and converted to café pending separate planning approval for change of use to be finalised Anticipate average rental rate to exceed portfolio average Abacus Property Group June Investor Day 11

97 Growth opportunities Abacus Property Group June Investor Day 12

98 Growth opportunities Case study St Peters, Sydney (NSW) Property acquired for $3.975M with GFA of 3,300sqm ($1,200psm) Located on Princes Highway in Sydney with excellent exposure to passing cars Facility in close proximity to neighbouring high density resi precincts e.g. Mascot, Wolli Creek, providing good demand driver for self storage High yield catchment with small ave. unit size Works completed in Feb-15 and trading commenced in Mar-15 Facility is trading strongly delivering above average portfolio rental rates with expectations to further improve once stabilised Abacus Property Group June Investor Day 13

99 Growth opportunities Case study Thornleigh, Sydney (NSW) Property acquired for $2.350M with GFA of 3,500sqm ($670psm on building GFA) and site area of 4,100sqm ($570psm on land area) Property acquired below land value with storage development potential in northern suburb of Sydney Development approval obtained to convert existing improvements into storage facility plus build more units on surplus land Works for stage 1 completed in Dec-14 delivering NLA of 2,627sqm and fully developed will be take facility to approx 3,600sqm Stage 1 has experienced strong let up since opening Anticipate stage 2 delivery in FY17 Abacus Property Group June Investor Day 14

100 Growth opportunities Case study Wodonga (VIC) Planning approval obtained to construct purpose built facility with total storage potential of approx 3,100sqm Stage 1 of project completed in Nov-14 with NLA of 1,700sqm and associated infrastructure Stage 2 of project delivered 1,400sqm and completed in Oct-15 Facility trading at optimal occupancy with strong yield for the local market Abacus Property Group June Investor Day 15